Rarely have so many resources been spent defending a claim that has a maximum value of $300,000, the cap on damages under the Tennessee Governmental Tort Liability Act.

This case already wound its way to the Supreme Court in 2009, with the Court reaching a critical holding on duty in negligence cases. In this Giggers Redux edition, the Supreme Court provides a brief outline for Tennessee state courts to analyze implied federal preemption. More importantly, the Supreme Court makes clear that the GTLA discretionary function exception does not apply to a governmental entity’s decision to reject having a policy and instead leave decisions up to its employees on a case-by-case basis.

Briefly, the case involves a claim for wrongful death under the GTLA. Plaintiffs alleged that Defendant should have evicted a tenant, Assailant, after Assailant was committed an aggravated assault against another tenant. Four years later, Plaintiffs’ Decedent was killed by a stray bullet fired by Assailant.

Preemption

The Supreme Court reversed the Court of Appeals’ ruling that Plaintiffs’ claim was preempted by federal law. The Court first set forth basic preemption principles:

The Supremacy Clause of the United States Constitution mandates that federal law preempt contrary state law. See U.S. Const. art. VI, cl. 2. The United States Supreme Court has held that state law may not frustrate or stand as an obstacle to the legislative purpose of a federal statute. Geier v. Am. Honda Motor Co., 529 U.S. 861, 873-74 (2000). Preemption can arise either in the form of explicit legislation by Congress or when federal legislation implicitly conflicts with state law. See Leggett v. Duke Energy Corp., 308 S.W.3d 843, 853 (Tenn. 2010) (discussing the difference between “express” preemption and “implied” preemption). Implied conflict preemption occurs when it would be impossible to comply with both state law and federal law or when congressional purpose in enacting the federal law is impeded by state law. United States v. Locke, 529 U.S. 89, 109 (2000) (quoting California v. ARC Am. Corp., 490 U.S. 93, 100-01 (1989)).

The Supreme Court then analyzed whether the statute at issue in this case, 42 U.S.C. § 1437d (1994), impliedly preempted a negligence suit against a public housing authority. Because Plaintiff’s claim dealt with conduct in 1998, the statute and corresponding regulations in effect at that time were at issue. Since then, the statute has been moved to a different code section and amended several times. Thus, the interpretation of this specific statute is probably not going to come up in any other cases, but the Supreme Court’s methodology is useful.

First, the Court looked to determine the congressional purpose in enacting the statute. It began by examining the language of the statute. The particular statutory section lacked its own statement of purpose, so the Court looked to the statute as a whole. The Court referred to the stated purposes of the original Act creating the statute – the United States Housing Act of 1937, which was to provide housing for low income families – as well as a later Act amending it – the Anti-Drug Abuse Act of 1988, which was to reduce drug-related crime in public housing. From these stated purposes of two different Acts, the Supreme Court concluded that the purpose of the statute was to promote safe public housing for public housing authority tenants.

Second, the Court considered whether permitting Plaintiffs’ negligence claim to proceed would stand as an obstacle to the congressional purpose. Again, the Court’s general summary of the law would be useful for anyone looking at a question of implied preemption:

The United States Supreme Court has noted that courts should not assume that Congress intends to supersede state law. N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995). The presumption against preemption is especially strong in areas that are within the historic police powers of the states. Wyeth v. Levine, 555 U.S. 555, 565 (2009) (quoting [Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)]). States traditionally have regulated health and safety matters. Medtronic, 518 U.S. at 485. The Supreme Court has exercised restraint when considering whether to preempt a state’s authority to regulate tort litigation. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 247 (1959) (“State jurisdiction has prevailed in [tort] situations because the compelling state interest, in the scheme of our federalism, in the maintenance of domestic peace is not overridden in the absence of clearly expressed congressional direction.”).

The Court also reviewed whether federal regulations implementing the statute would preempt state law, even if the statute did not. Although federal regulations are not legislative enactments, a federal regulation may preempt state law when the state law directly conflicts with the regulation or when it is impossible to comply with both the state law and the regulation. See Wyeth, 555 U.S. at 576 (“This Court has recognized that an agency regulation with the force of law can pre-empt conflicting state requirements.”).

Ultimately, the Court found no federal preemption in this case, concluding that permitting plaintiffs’ negligence claim would actually complement the purpose of the statute in ensuring safe public housing.

Discretionary Function Immunity

The Court also reversed the Court of Appeals’ ruling that Defendant was immune from suit based on the discretionary function exception of the GTLA, Tenn. Code Ann. . § 29-20-205(1).

To determine whether a governmental entity is entitled to immunity for a discretionary decision, this Court applies the “planning-operational test.” Bowers v. City of Chattanooga, 826 S.W.2d 427, 430 (Tenn. 1992). A governmental entity is immune from suit for actions involving “planning or policy-making.” Helton v. Knox Cnty., 922 S.W.2d 877, 885 (Tenn. 1996) (quoting Bowers, 826 S.W.2d at 430). When the act is merely “operational,” the entity is not immune. Id.

In Bowers, we determined that a planning decision usually involves consideration and debate regarding a particular course of action by those charged with formulating plans or policies. Bowers, 826 S.W.2d at 431; see also Helton, 922 S.W.2d at 885. A planning decision frequently requires a governmental entity to create policies or plans, formulate specifications or schedules, allocate resources, or determine priorities. Bowers, 826 S.W.2d at 431. Planning or policy-making decisions are not subject to tort liability, and a review of these decisions requires judicial restraint. Limbaugh, 59 S.W.3d at 85.

Operational decisions, however, implement “preexisting laws, regulations, policies, or standards” that are designed to guide the actions of the governmental entity. Bowers, 826 S.W.2d at 431. An operational decision requires that the decision-maker act reasonably when implementing preexisting policy. Limbaugh, 59 S.W.3d at 85. Unlike a planning or policymaking decision, an operational decision does not involve the formulation of new policy

Applying those principles to this case, the Court determined that Defendant’s conduct would not fall within the discretionary function exception. The parties in the case debated whether Defendant had a “one-strike” policy that would have required Defendant to evict Assailant after the prior aggravated assault charge. The Supreme Court found that irrelevant to the determination of whether the discretionary function exception applied. If there was a policy decision that Defendant had already made that would have mandated eviction, then the failure to follow that policy would be operational. On the other hand, if there was no policy in place, Defendant’s choice to evict Assailant would be guided by its judgment in implementing policy, but the mere exercise of discretion would not change the fact that the eviction decision itself was operation. “To hold otherwise would be to convert every operational decision requiring choice into a discretionary function.”

That last line is hugely important for lawyers and judges in GTLA cases. The discretionary function exception does not provide immunity for every bad decision just because the governmental employee had the power to make the decision. Instead, it immunizes policy level planning decisions. To invoke the discretionary function exception, a governmental entity must do more than say “the employee was empowered to make the decision,” or even “the council made a policy decision to give the employee discretion.” In that event (as in the case before the Supreme Court), the policy decision identifying which employees will decide on a case-by-case basis would be immunized under the discretionary function immunity, but those employees’ choices in an individual case would not be.